Today's business report explains why China is less scary than it seems.

Here's a number that's been reported by the New York Times and by Fortune magazine, and it's been repeated by the U.S. government and countless politicians. The number is this: China graduates 600,000 new engineers every year.

The number is used as a kind of shorthand to point out how vulnerable the U.S. is and how quickly China could overtake America as the dominant economy as the source of innovation in the world.

For our Monday focus on technology, NPR's Adam Davidson reports on one group that investigated whether that number is true.

ADAM DAVIDSON reporting:

The story in the New York Times in October, 2005 could not have been more dire. It quoted a panel of Nobel Prize winners and other leading scientists, telling Congress that America's economic advantages are eroding at a time when many other nations are gathering strength.

The proof that the New York Times used to convey this horrific situation was that now-famous number. Last year, the reporter wrote, more than 600,000 engineers graduated from institutions of higher education in China, compared to 70,000 in the United States.

DAVIDSON: Vivek Wadwha is an engineer, an entrepreneur and a part-time engineering professor at Duke University. He saw the numbers first in Fortune, then in a National Academy of Sciences report, then the New York Times. By late 2005, the numbers had been in almost every major publication. They'd been repeated on the floor of the House of Representatives. But Wadwha was still skeptical.

He and Gary Gereffi, the head of Duke's Engineering School, asked a group of students to look into the numbers. [Post-Broadcast Correction: Gary Gereffi is not the head of Duke's Engineering School; he is director of the Center on Globalization, Governance & Competitiveness at Duke University.]

Professor GARY GEREFFI (Duke University): When we started to try to figure out are these numbers real, it was amazing that when people were pushed, nobody really knew where those numbers came from.

DAVIDSON: The students decided that they would find out what the real numbers are.

Prof. WADWHA: I tell you, our students, they felt like they were on a mission from God. They were working day and night on this, and I'm surprised they still passed their other subjects.

DAVIDSON: The students quickly discovered that U.S. engineering schools graduate 137,000 four-year degree-holding engineers, almost twice the frequently published number of 70,000. Then they turned to India and China.

Prof. GEREFFI: It wasn't too long into the project when I think we were throwing up our hands and figuring - and wondering how did we get into this quagmire?

DAVIDSON: Ben Reising(ph), a Duke engineering student, ran the student team. If the U.S. was easy, India certainly wasn't.

Mr. BEN REISING (Engineering Student): It was absolutely frustrating. There were several months there where we just, we didn't know what the next steps to take were.

DAVIDSON: He and his team would be up at two or three in the morning, calling Indian engineering schools. Nobody could answer their questions.

Here's the problem. Things are changing fast in India. New engineering schools open constantly. University officials don't always have even the most basic information.

Mr. REISING: We would ask deans how many colleges do you have affiliated under your name, and they couldn't tell us.

DAVIDSON: If a dean doesn't know how many colleges he's running, he certainly can't say how many engineers are graduating.

It took a while, but eventually Reising and his team came up with a number they felt was close to right. The media accounts had India graduating 350,000 engineers a year. Reising says the real number is closer to 100,000.

With India done, the team turned to China.

Mr. REISING: Universities there were simply unwilling to provide us with information. We'd get through, and they'd be like, why do you want to know this information? You know, we're unwilling to provide it. We won't even give you our names.

DAVIDSON: Pretty soon, they realized how the system works. The Chinese central government in Beijing had simply decided that 600,000 is the number of engineers they want China to graduate each year.

Vivek Wadwha...

Prof. WADWHA: Government has told the provinces that they have to graduate more engineers, and so the provinces tell the Chinese government what they want to hear.

DAVIDSON: Some universities counted every student who studied anything vaguely associated with engineering as engineers. In provinces where there just weren't enough students of any kind, the government counted repairmen and factory laborers as engineers. This forced the Duke researchers to realize they had to answer a more fundamental question. What is an engineer?

Ben Reising...

Mr. REISING: It's a difficult question, but an engineer is someone who can take technical know-how and apply innovative solutions that are going to ultimately benefit mankind.

DAVIDSON: I interview people and then I use my technical knowledge of how audio editing works, and then I benefit mankind. So am I an engineer?

Prof. WADWHA: If you were in China, you would be classified as an engineer. In India you probably wouldn't. In the U.S.A. you wouldn't be.

DAVIDSON: In the end, the Duke project came up with an estimate of 351,000 engineering students graduating every year in China. That's just over half of the 600,000 number that had gained so much attention.

So China is graduating about two and a half times as many engineers as the U.S. does, but China's population is, of course, more than four times as big. The Duke researchers said these numbers should reassure Americans that we're doing just fine. And there's even better news, Wadwha says: our engineers get a much better education.

Prof. WADWHA: This is what America's advantage is. This is why our graduates have a much better chance of competing and, you know, doing innovation and rising within the corporate world than others. Their best is as good as our best are. However, the average engineer from the U.S.A. is much, much, better than the average engineer from India and China.

DAVIDSON: Chinese engineering classes are typically in huge rooms, where a lot of students learn mechanically, by rote. Americans get a far broader education. They learn at least some art and business. They leave school with better skills. So, Wadwha says, he can't understand why so many people think China is on the verge of replacing the U.S. as the world's leading innovator.

Prof. WADWHA: We're not a little ahead of India and China, we're miles ahead of India and China. The problem with this debate is that by constantly saying that we're weak, we're bad, we send the message to our children saying that if you get into engineering you're going to lose, you're going to have your jobs outsourced, and we become bad.

DAVIDSON: The National Academy of Sciences has now changed its report to reflect the numbers that the Duke team came up with. Most media accounts now use the Duke figures.

The researchers are quick to point out that there is no cultural explanation for all of this. Many students in U.S. schools are from India and China, and they tend to do very well here. The best ones, they say, usually decide to stay in the U.S. There's so much more opportunity for great engineers here.

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Correction June 14, 2006

Gary Gereffi was misidentified in this story. He is director of the Center on Globalization, Governance & Competitiveness at Duke University. NPR regrets the error.